U.S. Department of Housing and Urban Development ADMINISTRATION Special Attention of Notice 96-3 ADM Issued: May 31, 1996 Expires: May 31, 1997 Cross References: Subject: HUD Mass Transportation Transit Subsidy Program 1. PURPOSE. This Notice establishes the policy for the U.S. Department of Housing and Urban Development (HUD) mass transportation Transit Subsidy Program. 2. SCOPE. This Notice applies to HUD Headquarters, State and Area Offices. 3. BACKGROUND. The Federal Employees Clean Air Incentives Act provides for the establishment of programs to encourage Federal employees to commute by means other than single-occupancy motor vehicles. General Services Administration (GSA) guidance allows appropriated funds, if otherwise available, to be used for transit subsidies. The Internal Revenue Service (IRS) currently permits a $65 per month de minimis exclusion from fringe benefit taxation for mass transit passes provided to employees who commute via mass transit. The exclusion applies only if the passes are used for commuting to and/or from work. 4. POLICY. a. The Department promotes and encourages the use of mass transportation for commuting to and/or from work. b. HUD offices may participate in any program established by a State or local government that encourages personnel to commute to and/or from work via mass transportation. Such programs may involve the distribution of discounted transit passes or other incentives that reduce the cost to personnel who commute via mass transit. If a voucher or similar item which may be exchanged for a transit pass is not readily available for direct distribution, cash reimbursements may be substituted. ARSES: Distribution: W-3-1 c. With the exception of eligible vanpool riders, only HUD personnel who are not named on a worksite motor vehicle parking permit with HUD or any other Federal agency, and who commute via mass transit may participate in the Transit Subsidy Program. Eligible vanpools may receive parking benefits and participate in the Transit Subsidy Program. d. Vanpools are eligible if they meet the following criteria: seating capacity is for at least 6 adults (not including the driver), and the vanpool is operated by a person in the business of transporting persons for compensation or hire. Carpools are not eligible. e. Fare media are not transferable and are to be used only for the commute to and/or from work (unless local transit authorities issue monthly passes for unlimited use). Giving or selling fare media to other individuals, or purchasing the same from another, is prohibited even if the other individual is eligible to receive a transit subsidy. f. HUD offices may use available appropriated funds to subsidize mass transportation costs of approved participants. At initial implementation, the monthly transit subsidy will be 20% of the local monthly cost of mass transportation, up to a maximum of $21.00. A monthly minimum transit subsidy of $5.00 may be issued in cases where the transit subsidy would otherwise be less than $5. The percentage and the amount not to exceed may increase depending on the availability of funds from year to year, up to but not in excess of the maximum allowed as established by the Department. g. Distribution of fare media or cash reimbursements may be done through any functional area which provides adequate safeguards and monitoring of Government funds. h. Issuing fare media is the preferred method of providing a transit subsidy. However, if fare media is not available in denominations that will conveniently allow issuance of 20% of a monthly fare, cash reimbursement may be issued from the imprest fund. Employees must provide proof of purchase of fare media prior to being issued a cash reimbursement. i. An office may issue transit subsidies less frequently than monthly, such as every 6 weeks or quarterly, provided the transit subsidy does not exceed 20% of the monthly fare. For example, if a monthly fare is $54, the transit subsidy would be $10.80. The local transit authority issues transit checks of $21. The office can issue a transit subsidy check of $21 every 2 months. Page 2 j. An office may also group fares into ranges to meet local transportation authority fare media denominations. For example, monthly fares may range from $46 to $134 per month while the local transit authority issues fare media in denominations of $7, $15, and $21. An office may establish ranges of $50 and below for a $7 transit subsidy, $51 to $90 for a $15 transit subsidy, and $91 and above for a $21 transit subsidy. Ranges should be established to equate as closely as possible to the office monthly budget estimate for transit subsidies at the 20% level. k. HUD employees, who are located at outstations, may obtain copies of form HUD-80, Application for Transit Subsidy Program, from their Administrative Officer. The Administrative Officer will forward the completed application to the Transit Subsidy Office, where it will be processed for inclusion in the next month's dispensing account. Local State and Area Office approving officials will develop procedures for including qualified outstationed employees in the local Transit Subsidy Program. l. The purpose of the Transit Subsidy Program is to encourage maximum use of mass transit for commuting to and/or from work. To qualify for participation in the Transit Subsidy Program, an employee must use mass transit for at least 50% of monthly trips to and/or from work. To the extent possible, participants should be full time mass transit riders. Use of approved leave or official travel shall not disqualify an employee during a particular month, provided the transit subsidy does not exceed the actual monthly commuting expenses of the employee. m. Appropriate administrative action will be taken in cases of abuse dependent on circumstances and frequency of occurrence. Any action must be in compliance with the Agreement between the Department and recognized labor organizations or established HUD policy and procedure as related to non-bargaining unit employees. 5. RESPONSIBILITIES. a. The Office of the Assistant Secretary for Administration shall: (1) develop Departmental policy and provide oversight of the Departmental Transit Subsidy Program; Page 3 (2) develop, manage and operate a Transit Subsidy Program for Headquarters and Washington, DC Area Office employees; (3) prepare and submit all Departmental reports in compliance with Federal guidelines; (4) determine overall level of funding available for the Transit Subsidy Program; (5) provide funding to support the Transit Subsidy Program; and, (6) designate a Headquarters Approving Official. b. Administrative Service Center Directors shall: (1) implement the policies and procedures set forth in this Notice in State and Area Office locations, as appropriate; (2) determine funds required; reimbursement will be provided to the servicing Budget Office from HUD Headquarters on a quarterly basis; charges shall be made against subobject class 1285, Transit Subsidies; (3) develop, manage and operate State and Area Office Transit Subsidy Programs, and prepare consolidated reports for the Office of Administration, as required; and, (4) designate a State and Area Office Approving Official. c. Applicants shall complete an annual "Transit Subsidy Program Application." A sample application is attached. Use of this application form is not mandatory. Application forms may be developed at the local level. The application must contain a warning statement alerting the applicant to possible criminal prosecution, civil penalty action, and/or disciplinary action for making false statements (see Attachment 1). d. Participants shall certify in writing, upon receipt of fare media that they are eligible for a transit subsidy, are obtaining it for their commute to and/or from work, and will not transfer the fare media to any other individual (see Attachment 2). An employee who fails to utilize public transportation after being paid a transit subsidy shall be indebted to the Federal Government and will be required to repay any part of the transit subsidy that was not Page 4 utilized in conformance with the employee certification. Amounts owed by an employee will be recovered in accordance with 5 U.S.C. 5514. e. Approving Official shall review applications and verify individual transit subsidy amounts based on the applicant's address. 6. GENERAL REQUIREMENTS. Prior to establishing a Headquarters, State or Area Office Transit Subsidy Program, the Office of Administrative and Management Services in Headquarters, and the Administrative Service Center Directors shall do the following: a. Communicate with other Federal agencies within the local area to exchange information and explore the possibility of creating consolidated programs. b. Establish standard operating procedures to include safeguards that prevent waste, fraud, abuse, mismanagement, or misappropriation of Government funds. These procedures shall include: (1) recording and accounting for monthly expenditures to permit the proper maintenance of accounts and the preparation of reliable financial reports; (2) ensuring that the monthly transit subsidy to a participant does not exceed the monthly amount excluded from fringe benefit taxation under IRS regulations; (3) ensuring that review and assessment of management controls are conducted annually; (4) ensuring that participants leaving Federal service do not continue receiving transit subsidies; (5) obtaining annual certifications of continuing eligibility of applicants for a transit subsidy; (6) ensuring appropriate advance notice is provided to local labor union representatives, if applicable, and that all collective bargaining obligations under law and any applicable collective bargaining agreements are met. c. Verify that only HUD personnel using mass transit are eligible to participate in the Transit Subsidy Program. Basic verification criteria are: (1) the individual is a HUD employee; Page 5 (2) the individual certifies in writing, at least annually, that he/she actually commutes or expresses an intent to commute to and/or from their worksite via public mass transportation; and, (3) the individual is not named on any motorized vehicle parking permit with HUD or any other Federal agency, except as a member of an eligible vanpool. 7. MONITORING AND CONTROLS. a. Participation must be monitored at the site where fare media are provided to ensure that only one transit subsidy per month is provided to eligible personnel. Applications for participation in the Transit Subsidy Program must be cross-checked initially and at least quarterly thereafter to ensure applicants/participants are not members of carpools, or holders of any other form of vehicle worksite parking permit (vanpools excepted) with HUD or any other Federal agency. This parking permit restriction does not apply to eligible vanpools. b. Employees must certify at least annually that they are eligible to receive a transit subsidy, and are receiving the appropriate amount (this may be done monthly on the sample form attached - see Attachment 2). c. Local labor organizations must be notified and any collective bargaining responsibilities fulfilled prior to the implementation of the policies and procedures set forth in this Issuance. d. All requirements of the Privacy Act of 1974, as amended, and the System of Records requirements of 49 CFR Part 10 must be met. 8. REPORTING REQUIREMENTS. All HUD Offices operating a Transit Subsidy Program must submit an annual report to the Office of Administration. Reports are due by November 15th. Minimum reporting requirements include the following: a. a brief description of your program; b. number of fare media issued; c. number of participating employees, and previous mode of commute; d. total annual funds expended; Page 6 e. a statement indicating that annual recertification by each employee has been completed. 9. REFERENCES. a. Public Law 103-172, dated December 2, 1993, Federal Employees Clean Air Incentives Act, which provides for the establishment of programs to encourage Federal employees to commute by means other than single-occupancy motor vehicles. b. GSA Bulletin, FPMR D-227, published in the Federal Register, 7/23/91 (56 FR 33760), pertains to participation by Federal agencies in State or local government programs designed to encourage the use of public mass transportation. c. 26 CFR Section 1.132-6 and 56 Federal Register 23038 (05/20/91) authorize exclusion from gross income of employer-provided fare media not to exceed $60 in any month. d. The Privacy Act of 1974, as amended, restricts access to information identifiable to an individual. e. 49 CFR Part 10, Maintenance of and Access to Records Pertaining to Individuals, contains requirements for storage and security of personal data. f. Section 132(f) (5) of the Internal Revenue Code of 1986 contains definitions of transit pass and commuter highway vehicles. Page 7 ATTACHMENT THIS ATTACHMENT IS A COPY OF FORM HUD-80, TRANSIT SUBSIDY PROGRAM APPLICATION. ATTACHMENT THIS ATTACHMENT IS A COPY OF FORM HUD-81, TRANSIT SUBSIDY PROGRAM CERTIFICATION.